California: News and Insight on Business in the Golden State | THE STATE / DAY-CARE OPERATORS

Children's Wonderland Lawsuit to Proceed

U.S. District Judge John G. Davies in Los Angeles has denied a motion for summary judgment in a lawsuit filed by Children's Wonderland Inc., a move that allows the case to go forward. Last May, Children's, an Agoura-based day-care operator, filed suit against investment banks Royce Investment Group and First Cambridge Securities Group and several of its principals, alleging fraud and breach of fiduciary duty. Specifically, the beleaguered company argues in the suit that the banks engaged in a scheme that prompted the collapse of Children's Wonderland's stock price, a delisting from Nasdaq and a loss in value to its shareholders. In his March 11 ruling, Davies said that "there is sufficient evidence" to allow the case to proceed. No trial date has been set.